March 20, 2020 / 12:23 PM / 11 days ago

Contractual interest rate, not equity, applies in bankruptcy court - appellate panel

A bankruptcy judge can review the interest-rate escalation provision of a secured loan for legality but not for reasonableness, a federal appellate panel held Thursday.

The decision by the Bankruptcy Appellate Panel of the 8th U.S. Circuit Court of Appeals revives a claim by the Bank of Missouri for an additional $443,000 in interest from the proceeds of a 2018 auction of the assets of Family Pharmacy Inc and its related companies, based on a contractual provision that raised the interest rate to 18 percent if Family Pharmacy defaulted on the note.

To read the full story on Westlaw Practitioner Insights, click here:

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